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Revealed: threats by CAA to MyTravel

MYTRAVEL, the embattled holiday company, received warnings from a government financial watchdog over the state of its balance sheet a year ago, court documents show, writes Dominic O’Connell.

The Civil Aviation Authority, which regulates package-holiday sales, set out its concerns “in a series of letters between December 2003 and October 2004”, according to a High Court judgment on a wrangle between the company and its bondholders over the terms of a financial restructuring.

The ruling also revealed that MyTravel’s board had thought about suing its former directors. The current board had “evaluated claims against directors” but had decided that they would be “inappropriate”, Peter McHugh, the chief executive, told the court.

MyTravel suffered a spectacular fall from grace two years ago when a string of profit warnings led to the departure of several directors, including founder and chairman David Crossland.

MyTravel’s current management is racing to complete a financial restructuring